PBCT Dividend

PEOPLES UNITED FINANCIAL dividend

Although PBCT has a dividend of 0.18 with an ex-dividend date of Oct 31, you can sell covered calls on PEOPLES UNITED FINANCIAL to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

PEOPLES UNITED FINANCIAL (PBCT)
Bid Ask Last Change Volume P/E Market Cap
14.35 15.48 15.49 -0.55 3.9M 14 6.0B

PBCT Dividend-Like Income Using Covered Calls

With PBCT at 15.49, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 0.46 0.1
5% 0.77 0.2
10% 1.55 0.4

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On PBCT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 16.00 0.05 26 0.2 0.52 (3.4%)
Dec 21 16.00 0.15 61 0.2 0.52 (3.4%)
5% Yield On PBCT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 16.00 0.15 61 0.2 0.52 (3.4%)
Feb 15 16.00 0.40 117 0.3 0.52 (3.4%)

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